>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a main street perspective. to our viewers in the united states and those of you joining us from around the world welcome. we have full coverage of the stocks and stories making headlines on this thursday. shelby holliday is live in graceland for birthday celebrations remembering elvis presley. julie hyman is watching the rally in the equity markets come the second and two days.

hans nichols is in paris with the latest on the manhunt for the terror shooting suspects. set the scene for us. what is the reaction in paris the day after this tragedy? >> it has been a chaotic day, mark, full of rumors and violence in the south of the city. this evening the eiffel tower will go dark in a symbolic moment. there was a moment of silence. right now the city is all but little i candlelight. there is a vigil outside the magazine's offices. later on there is going to be that moment at the eiffel tower. there has also been some rallies. and there you see the symbol that of a pencil, the idea that a pencil is more potent that an automatic weapon. that is what supporters of the

slain are trying to convey. >> in the aftermath of yesterday's shooting in paris, members of france's muslim community were quick to condemn what happened. what are the leaders in the community doing outcome tensions further- -- doing now to calm tensions further. >> they are continuing with that line and some of the leading imams in paris paid their respects with individual. the question is can they came some of the anger, some of the outrage? we have seen a handful of attacks across france against mosques. you are having an important and in some ways incendiary debate about immigration. in germany there is an anti-immigration party that is getting force. here in france, the leader of the far right national party, she called this morning on twitter to have a national referendum for repealing the death penalty.

the question is how can this dialogue find a middle ground in the backdrop of still this manhunt going on? the latest we know, we suspect that these two brothers are up north about 40, 50 miles away the 34- and 32-year-old brother is still at large. please are surrounding the area and there are reports that they had robbed a gas station earlier and that they are armed and dangerous. one final note -- this is a city that yes, it is free lit by candles, but there is a strong and heavy police presence in the streets of paris tonight and isis bike that will continue until this is resolved -- i suspect that will continue until this is resolved. >> hans nichols reporting live from paris, where as you see the eiffel tower has gone dark as a sign of remembrance and morning for those who lost their lives in yesterday's tragic shooting.

a counterterrorism director in the state department under hillary clinton joins me from dartmouth college. welcome to "bottom line." thank you for your time. >> thanks for having me. >> a bloomberg view contributor in his column today wrote "the terrorists on at least two levels have already won. they have scared powerful news organizations and use omission and have stoked european islamophobia." what in your opinion, must be done to start countering this? >> i am less worried abou publict cowing publications into simitian although everyone ought to think hard and be prudent about what it is they publish so they don't overheat the situation. i think the islamic phobia question is an important one and a real-time for europe's leaders

and religious leaders to think hard about what they can do to deal with this phenomenon because in a period of economic stagnation, strong anti-immigrant sentiment, this threatens social peace in a very important way and the rise of parties like marine le pen, all of these phenomena are worrisome when it comes to relations between muslim minority communities and the countries they live in. >> yesterday i interviewed a scholar from the council on foreign relations and she told me one area societies need to focus on is preventing radicalization from taking root by reaching out to the most vulnerable immigrants. why is it enough being done to integrate them -- integrate them into society's so they don't

feel marginalized and become easy prey for islamist recruiters? >> it is being done in many of these countries. it is an area policy that has not been terribly well-developed. it requires a lot of money and these budgets are tight right now, due to the economic downturn. it is an area in which policymakers are learning by doing. it is quite difficult. a challenge. i have a feeling that this is going to concentrate their mind on it more. working with immigrant communities has not been europe's strong suit. these are countries that historically have not seen themselves as immigration countries and these communities are often quite poor. it is energy need but not something that there's a textbook on right now -- an urgent need for nothing something that there is a textbook on right now. >> dan benjamin joining me from dartmouth college. thank you so much for your time

today. former new york city mayor rudolph giuliani joins me on the phone. welcome to "bottom line." thank you for your time. >> thank you very much for having me. >> in the wake of the attack in paris, have you been getting calls from officials concerned about terror prevention methods? >> yes. i think -- in fact i just finished a discussion with a client about that. i think there is a feeling that there is much greater risk. of course, this feeling has been out there for some time. something like this just reminds you of it. it isn't as if this attack has increased the risk. the risk has been there for several years. i think part of it has been increased by the president's very weak reaction to these things. my experience with this islam extremist terrorism which goes back to the 1970's, i should tell you, when i was an

assistant u.s. attorney, is that when america is timid about these things, they take more advantage, and when america is on the offensive, as we were during the iraq and afghanistan wars we have less of these incidents. >> yesterday's attack, as we all know, took place in paris, and i understand your concerns because you have expressed them on different media about the u.s. response, but specifically for parisian officials what type of coordinated international response should they undertake? >> well, the parisian officials have been quite concerned about this for some time so i have no doubt that this was not their fault in the sense that it could have happened anywhere else. i know one of these people is a person of concern, but that list has to be a very, very long list

. president bush used to say this best -- we can be right 999 times and if we are wrong once, unfortunately like we had in boston, we can have a terrorist attack. this can happen to any of us. my concern is that the president's failure to use the term "islamic extremist terrorism" is encouraging to them. it is impossible to fight an enemy that you do not properly identify. they properly identify us. the islamic extremist terrorists have targeted us -- there was third world -- the western world, the infidel world. we have not properly targeted them so we can focus our efforts in the right way in identifying them, sharing information about them. we are not dealing with terrorism. we're dealing with islamic

extremist terrorism. and until the president utters those words and has his administration analyze this problem from that point of view we are going to be in greater danger. >> mr. mayor, what lessons were learned after the 9/11 attacks that could help the paris investigation be conducted more efficiently? >> well, i think that, first of all they are going to need a great deal of international cooperation, because we don't know where these people received their training. there is no question these were fairly professional operatives not just people who were doing this for the first time. there has to be some international connection here international cooperation. i think the french response so far has been very good. i think the french people have responded in a very brave and resilient way, which is very

important. i was in london when the bombings took place in 2005. in fact, we were half a block away from the liverpool station when the first bomb went off. i think that one of the things that helped a lot was the brave and resilient response of the british people. and i see the french doing the same thing. it is a very important component to this. >> mr. mayor, we have about a minute left. i must ask, how to investigate a terrorist element in any community without condemning the entire community? >> this is -- >> have you make it clear that this is not they are not the problem? >> this is not a difficult problem. every community has bad people. i investigated for much of my career the mafia. i am an italian american and i missed it at the mafia.

italian-american groups -- investigated the mafia. italian-american groups used to get angry at me saying that i was talking the whole community by investigating the mafia, and i said i am not tarring the whole community, i'm just talking about those people in the community who are criminals. there are approximately the same percentage of criminals in the italian community as there are in other communities, suggest it used to it. every community has some very bad people. islamic community has some very evil people. it is not the entire community by any means. and all the good people in the islamic community should be angrier about islamic extremist terrorism than i am. to be unwilling to say "islamic extremist terrorism" because you are afraid that you are going to offend all islamic people is like being unwilling to say "mafia" thinking that you are

going to have an all italian people, or unwilling to say "nazi" thinking you are going to offend all german people. the failure to say it displays a weakness -- that is a fundamental weakness of the way the obama administration has approached this whole problem, and i think puts the world and more jeopardy. >> former mayor of new york city rudolph giuliani, joining us on the phone. thank you so much for your time and your perspective. we appreciate it. >> thank you. >> republicans in congress are trying to force approval of the keystone pipeline this week despite the threat of a presidential veto could we will look at what some lawmakers are doing to get it built. ♪

>> let's turn back to the markets. the s&p is close to wiping out its losses for this year as the new year's hangover has finally cleared. julie hyman is here to walk us through the rally. quite a reversal after, i guess the hangover of the past few days. >> with the depth of the selling we are now seeing it is not commensurate, at least close to bounce back and recouping those losses. checking on the current boards

the s&p 500 is up 1.6%. that leads it down very fractionally for this young 2015. but it reflects the struggle by investors to account for the current environment, to factor in central bank stimulus, to factor in recent economic data. speaking of economic data, you have the four point 2% decline in the session that ended the day before yesterday, and in the past couple of days we have had better economic data. you had the adp jobs report yesterday and jobless claims that are than estimated-- better than estimated. all this leads up to the jobs report tomorrow. it will be interesting to see how investors react to that. if you look at how the vix has been performing we have this bounce around effect as well. it measures volatility and there has been this call for return to volatility. if you look at that chart, which represents the last six months or so, you definitely see that

even of historically going back further we are still at relatively low levels, we have seen an overall increase in the amount of volatility. >> which groups are doing the best? >> it is a broad-based rally so all of the groups in the s&p 500 are up in particular we are seeing the cyclical groups do well. things like materials and technology and energy is also gaining once again in today's session. that is a group that has been very important and very much in focus. oil itself has not been seeing a lot of change after a very active few sessions, but today it is a little bit more quiet. >> truly will be back with another "on the markets" update in just a few minutes as we continue to follow the bouncing ball on wall street. as julie mentioned, coming back after a 3.5-day rough start to the year. remembering the king of rock 'n roll -- elvis presley on what

would have been his 80th birthday. we will take you live to graceland in memphis, tennessee. ♪

>> the paris attack is raising new fears about the terror threat in the united states. it is also playing into the looming battle over homeland security funding. peter cook has the latest from capitol hill. lawmakers are starting to learn more about exactly what happened yesterday in paris. >> that's right, lawmakers today attending a closed-door briefing to learn more details, and also what the united states might have known about these suspects. the names have been scrubbed within u.s. intelligence

databases, we are told by a lawmakers familiar with the situation, and there's concern by lawmakers leaving the meeting that they are worried about the tactics here. the fact that a soft target was selected in paris by these terrorists and they are worried about some sort of replay and the notion that perhaps these individuals were trained overseas, perhaps syria and iraq, and came back to france. could the same thing happen year with american citizens who have gone abroad to those countries as well? question marks on the minds of lawmakers. >> the attack weighing on the fight over homeland security funding. of course, that is in the middle of a political back-and-forth on the hill. what is going on there? >> you recall at the end of last year the agreement to fund the government through most of thousand 15 one agency was not included, no as the department of homeland security, only funded through the end of next month. republican starting next week are going to push for new funding for the agency but will

find that to an effort to roll back the president's immigration executive action. the question being posed now, is this the right time to put the homeland security funding in doubt? speaker boehner asked about that today. >> i don't believe the funding of the department is in fact at risk. what is at risk is the rule of law and the sanctity of america's constitution. the president has taken actions that are beyond the scope of his ability, and congress cannot just sit here and look the other way. we have to take action and we well. >> so 2 different issues here. the paris tragedy, the fight over immigration in this country, they are now inked politically. it will play out next week and it could get ugly. don't be surprised to hear democrats in the white house really go after republicans for putting this running in putting this funding in doubt.

-- for putting this funding in doubt. >> we are coming on 26 minutes past the hour and that means bloomberg television's "on the markets." here again is julie hyman. >> stocks are trading your the highs of the session on this 2-day rally. the dow is up 285 points. the nasdaq is 1.9%. again, flirting with that level for 2015 to the race all the lawsuits for the year. -- erase all the losses for the year. pmo capital is cutting shares of a luxury retailer. it has a price target of $32. shares are down by the most in almost five months. it saw its competitor fall earlier this week on a downgrade. shares of constellation brands trading at a new all-time high in contrast. the global seller of wine and spirits boosted its profit forecast this year after reporting revenues that topped

analyst estimates. we will have more on the markets in 30 minutes and more "bottom line" is next. ♪

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i am mark crumpton. the showdown over the keystone xl pipeline continues. the senate energy committee approved the pipeline bill and it will go to the full senate for debate. the house of representatives is on track to vote on his version of the bill on friday. the white house has already said it will veto any keystone legislation. for more on the debate, douglas holtz-eakin and kevin book

of clearview energy partners join me from washington. doug let me start with you. keystone has been languishing for review since 2008. why are republicans pushing for passage this week? >> the white house has been hiding behind process for six years. a six-year process is not something anyone should be proud of, not one anyone should be committed to and the republicans have lost their patients and have the opportunity to do something about it and that is what you are seeing in the house and senate. >> kevin, what is at stake, particularly for the state of nebraska? on friday the state supreme court is going to conclude proceedings on the validity of the proposed route of the pipeline through the state. >> every friday the supreme court has a chance to settle the question of whether or not the pipeline is valid and the law that allowed it to be expedited stand or not. tomorrow we could get our answer of the question is really one of whether or not nebraska is going

to provide an excuse for the state department. it could be that the supreme court overrules the lower court and suddenly there is going to be as a discussion of whether or not it is time to proceed with a yes-no answer. >> is it about yes-no doug hol tz-eakin? >> keystone pipeline or not, if you do the accounting it is hard to make the case that you shouldn't build the pipeline. it is in the economic interest and should have gone forward already and has been put off for far too long. i think you will see that casemate on the florida house -- on the floor of the house, where i expected to see it passed. the interesting thing is how things play out in the senate. there will be eminence offered in the floor and some of those may be able to attract democrats. kevin follows this closely i wonder what he thinks the chances are. >> doug i think the democrats

have a series of amendments that are nothing more than poison pills. they don't have much chance of making their way onto the bill. >> i'd agree. i think it is the republican amendment's to attract democrats. >> oh, yeah. the one that could pull democrats on is the efficiency amendment. senators shaheen and portman have an efficiency bill that is been languishing due to partisan warfare. i could be a vote-getter. whether it gets 67 to uphold the veto, not clear about that. >> will it get to 67? it seems like there is been horsetrading behind the scenes. joe manchin and senator hoeven has been trying to get the necessary votes. >> i certainly think they will get to 60. we did see senator manchin cross in committee and i think it will get more on the floor and 67 is a big reach and i think that the cap please don't in isolation.

it is, as kevin said, will they put in the efficiency bill which is popular on both sides of the aisle? will draw enough votes? >> the united states is not always agreed with allies on issues that could be of mutual benefit. if president obama vetoes keystone come will irreparably harmed be done to the relationship between the u.s. and canada? >> i think this is an important consideration. the canadians are already upset. harm has been done to our power relationship with our most important trading partner and it would be more severely damaged by a veto. i think that is unwise. the stakes are too high, we have too many shared interests with canada, and it is not worth it over this pipeline to engage a further dispute with the canadians. >> kevin, you agree with that assessment? >> i absolutely agree with that. if you read the newspapers and listen to the commentary on canadian television, they are livid about the delay and a regard this as an affront.

a regard this as an economic hegemony being exerted by their southern neighbor. the question is why should we continue to try to do business with someone who won't do business the way they have in the past? sorry -- >> my colleague rebecca canty has a story on bloomberg.com that says that canada doesn't need to keystone pipeline in the u.s. crude oil supply battle stop she writes, "the record amount of canadian oil flowing into the western -- shows that some of the pipeline projects original goals are already being met and if canadian producers are already sending oil across the border, weiss keystone necessary? >> i think -- go ahead, kevin. >> you have already got a rich market for oil in the gulf of mexico but most of that market is being served by venezuela and

mexico. keystone could bring canadian oil to that market in greater volumes, democratizing the market and bringing a better price for refiners. i think that is worth doing. if it travels by pipeline, the price will be lower. so it has a more democratizing effect. >> doug, you wanted to jump in? >> i agree with that trick from the canadian point of view they get access to a market they would like to compete in. economics and poor -- economics abhors a vacuum. >> the question for both of you -- doug, you first -- is the keystone debate about the pipeline or is it about overall u.s. energy policy and if, as expected, the president does veto the legislation, then what? >> certainly does has become our symbolic issue and these are symbolic votes, which is one of the reasons that logic and

rationality do not dictate the outcome. and the president's veto will be to make a point. before chile, the canadians think that's unfortunately, the canadians think that the point is that the americans are are our ally. >> i don't think it is about the oil, mark. the state department has allowed extra point to flow down the alberta clipper line. another pipeline is being serviced. they were against canadian oil they had a chance to say no and didn't take it could this has more to do with politics, as doug said. >> kevin book and douglas holtz-eakin, thank you so much for your time. i appreciate it. >> thank you, mark. >> more from the consumer electronics show could we will speak to the president of audi america and look at the new driverless car. ♪

>> it is time for today's latin america report. constellation brands boost forecast for the year after sales of beer brands such as modelo spurred growth. beer sales gained 16% last quarter, outpacing its total growth of 7%. constellation obtained the rights to corona the country's most popular view report, in 2013, as part of a deal with anheuser-busch inbev. that is your latin america report for this thursday. return to the -- we turn to the consumer electronics show in las vegas. brad stone is there. brad, what do you have for us? >> card technology is never been a bigger part of ces. i spoke to the audi america president for his vision of the future of driving.

i'm here with the president of audi of america. a scott, thanks for joining us. >> pleasure to be here. >> you pulled quite the stunt bringing an audi a7 from silicon valley to las vegas and driving on its own. tell us what technology went into the car and how soon buyers will be able to see it. >> you have companies with press releases and "we might do this care . audi, we are not a might-could company. it relies on a whole lot of chips and processors and sensors and radar, all of these things, including cameras, working together to basically pilot that car down the road. >> is it developed in-house or do you partner with companies like google that very publicly have been developing this technology for many years? >> we do partner. we have a partnership with a

copy called nvidia which is the backbone of mobile devices. they are eighta chip company. of course, we work with qualcomm and a host of other players. truth be told, you have got to integrate these things. you have to put your engineers with their engineers. when are you going to see this stuff? i think it is going to come sooner than anyone expects and future generations will roll it out. >> will it come in the u.s. with the regulatory environment here ready for a driverless car? >> i am an optimist and i believe in the fact that look today, we have adapted christian. since in our cars -- we have adapted cruise control systems in our cars. it takes the speed up again. much of it is happening. consumers are accepting it, and it is going to keep progressing. >> give me a prediction --

as an affordable car buyer, not necessarily in the luxury car market, when do buyers like myself a see an affordable autonomous vehicle. >> you look like an a7a guy. mainstream, proximally 10 years. if you look at what is happening with processing power, these things are multiplying faster and faster. again, i'm optimistic and i absolutely believe it will be accepted, because it is safer more convenient, more fuel-efficient, and it prevents the biggest issue behind accidents, some form of driver error. that is why it will be accepted because it is going to work. >> let's talk about your in- vehicle system. do you think that buyers are making the decisions about the cars they bite based on the in-vehicle computers? it seems like the systems duplicate the same features. >> i can tell you 100% they are.

if you look at the audi connect system which allows you to navigate with the google earth it gives you a point of her interest search via google. if i look at it, 67% of every audi on the road has audi connect. 35-40% of them the major buying reason was having audi connect. we see it as being a very big thing and as you referenced, we have the virtual cockpit, and this is very, very slick. people don't want to go from there i had mobile world, -- their ipad mobile role that what they have great processing speed and graphics and then time warner. that is the magic of audi. >> you guys made it the conscious decision to put the virtual cockpit right above the steering wheel. what is your internal data tell you about the possibility of distraction in the vehicle? >> everything we have seen from driver distraction -- we have tested it extensively.

there is a lot of things we do in our cars and there are things we don't do intentionally for driver distraction. you have a single screen as opposed to driving two screens. i think there will be less driver distraction in that example. you are looking at a road in all your data is right there just below and it is a smart solution. 80-90% of your action is on the steering wheel. but the point you make is accurate and believe me, we are extremely cognizant of driver distraction. for that me tell you the flip side -- if you don't integrate these things, what the customer is going to do is get out of the car and use the phone. >> thank you very much. >> thank you very much, appreciate it. >> well, mark, let's hope scott is right and all the additional technology in the car doesn't create more distractions for drivers on the road. >> brad stone joining us live from vegas. thanks. it is elvis' 80th birthday could we will go live to graceland when we return. ♪

>> even though elvis presley isn't around for his 80th earth day, his family is still throwing him a big party and he is reserving -- receiving a birthday gift in the form of bonds. the deceased pop culture icon is enjoying unprecedented success. shelby holliday is live in graceland in memphis, tennessee. fill us in on what is going on over there. >> this morning there was a huge birthday celebration. the estate estimates that 1500 people came out singing "happy birthday." it is a huge day at graceland but even for decades after he passed away, graceland remains an incredibly popular tourist destination. more than half a million people visit elvis' home every year the third most visited house in

the united states, and 40% of the people who come here were born after elvis passed away. all this is still around, still entertaining us all -- elvis is still around, still entertaining us all, and it is part of a plan to make money off of the dead pop star. he made $25 million in 2014 and this birthday party celebrates the fact that his legacy is able to live well beyond his death. >> if these bonds take 30 years to pay off it means they have to keep attracting tourists for decades. what is their plan to keep people coming back? >> exactly, mark. as you mentioned, the bonds -- a local development authorities issuing $125 million in bonds to finance new properties here at graceland or that includes a 450-room hotel. they are expanding graceland to continue bringing people to memphis and keep them here longer. local authorities estimate that elvis' graceland will bring in about $1 billion over the coming years for that city.

the plan is to keep making elvis relevant, especially for future generations from using technology. new albums on itunes, a channel facebook and twitter pages. they are talking about a hologram show possibly in las vegas. there is still a lot of money to be made on elvis and he is one of many dead celebrities that can make millions and millions of dollars in the afterlife, and he is not around to spend money so it turns out pretty well for his estate managers. >> no doubt. bloomberg's shelby holliday joining us live from graceland in memphis, tennessee. stay with us, another check of the market movers on the other set of the break. ♪

>> get the latest headlines of the top of the hour on bloomberg radio and streaming on your tablet and bloomberg.com. that does it for this edition of "bottom line." i am mark crumpton, reporting from new york. "on the markets" with the julie hyman is next. i will see you on friday. >> it is 56 pass the hour and

that means that bloomberg tv is "on the markets." i am julie hyman. it looks like the markets are trading at the highs of the session. technology helping lead the gains and the tech-heavy nasdaq is the best-performing index in terms of percentage could tech stocks are the focus of today's sector report. joining me with the 2015 outlook is scott kessler of s&p capital iq. we are seeing these stocks perform well today. i want to start with one of your predictions. you had a good record in 2014. i want to start with one of your protections for 2015 because it happens to be in the news today. at number three you say that we do not see a combination between yahoo! and aol and it is in is because there is been another letter encouraging yahoo! to do just that. why do you think it is going to happen? >> thanks a lot, julie.

one we think about yahoo! combining with aol, there are interests who think that this combination makes a lot of sense, and that is largely because these are companies that seem to be similarly structured similarly positioned, and frankly, similarly let's say, allocated when you think about investors in what they are doing . the problem we see is that neither company, in our view -- we cover yahoo!, we don't cover aol. but when we look at these companies, we don't necessarily know that the other one would help the other company. i don't know what aol would do for yahoo! and i don't know what yahoo! would do for aol. it is not like their strengths are the other costs weaknesses -- the others weaknesses. and yet you think that yahoo!

will be making acquisitions, just not that kind of acquisition. >> when you think about yahoo! it is fair to assume that given the substantial proceeds to company receives from the alibaba ipo late last year that there are a lot of options at their disposal. they have shown that they are interested in an aggressive at this point with respect to acquisitions. as pointed out in the piece, they acquired tumblr in 2013, the largest a deal they have done in a decade, and we expect them to do at least one billion-dollar deal this year. we think they can look to technology, video, mobile. we are not so sure that content is the right path for them, and friendly, that is one of aol's strengths and that is a reason it isn't -- it doesn't make as much sense for the companies to combine. >> we don't have time to get to your 15 predictions but one that surprised me a little bit is "we don't see apple becoming a

serious threat to income and digital payment options in 2015." is it because it is not a serious competitor or it does not have enough time you? >> i think it is definitely more the latter. apple pays getting tremendous buzz and a news flow but the reality is that these things take time and we think that merchants are going to have to learn how to train your employees for usage. people will have to adopt the platform. in addition to that, people have to on the right technology to make use of the and it will take a lot of time, we think, and people who are proclaiming apple the winner here are going to be prematurely incorrect. >> scott kessler thank you so much. "street smart" is next. ♪

>> welcome, everyone top -- to the most important hour. this is "street smart." stocks betting with the fed. may be patient when it comes to using rates. also speculating paired a look at the smp on track to race the 2015. the euro is meanwhile thinking. one dollar